{"id":1011,"date":"2010-11-29T11:37:34","date_gmt":"2010-11-29T16:37:34","guid":{"rendered":"https:\/\/demand-planning.com\/?p=1011"},"modified":"2010-11-29T11:37:34","modified_gmt":"2010-11-29T16:37:34","slug":"what-happened-to-cpfr","status":"publish","type":"post","link":"https:\/\/demand-planning.com\/2010\/11\/29\/what-happened-to-cpfr\/","title":{"rendered":"What happened to CPFR?"},"content":{"rendered":"<div id=\"attachment_1012\" style=\"width: 160px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/11\/Lora.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1012\" class=\"size-thumbnail wp-image-1012 \" title=\"Lora Cecere - Altimeter Group\" src=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/11\/Lora-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" \/><\/a><p id=\"caption-attachment-1012\" class=\"wp-caption-text\">Lora Cecere: Supply Chain Shaman<\/p><\/div>\n<p>Go to any<a href=\"http:\/\/www.ibf.org\/conferences.cfm?fuseaction=upcoming\"> supply chain conference<\/a>, and you will hear it.\u00a0 Yes, the term <em>collaboration <\/em>is bandied about. It is over-used and often over-hyped in discussions largely without meaning.\u00a0 So, what does it mean?\u00a0 And, what happened to the <em>supply chain collaboration <\/em>initiatives of the 1990s?<em> <\/em><\/p>\n<p>Let\u2019s start with the definition.\u00a0 The greatest success in supply chain relationships is when true collaboration happens.\u00a0 What does it look like? It is a when a sustainable win\/win value proposition. \u00a0\u00a0Six elements are required:\u00a0 <a href=\"http:\/\/www.ibf.org\/index.cfm?fuseaction=Home\">resources<\/a>, skills, joint vision, leadership, a plan and aligned incentives.<\/p>\n<p>The problem is that the so-called <em>\u201ccollaborative programs\u201d <\/em>of the 1990s focused solely on process missing the mark on these six elements.\u00a0 The tenants of VMI and CPFR were well-intended, but they fell short in building true collaborative relationships.\u00a0 Let\u2019s take a closer look.<\/p>\n<p><strong>Why did CPFR not gain wider adoption?<\/strong><\/p>\n<p>Many tout success, and many <a href=\"http:\/\/www.ibf.org\/presentation.cfm?fuseaction=downloadpresentation\">conference presentations<\/a> expound on benefits; but back home at the office, the teams are confounded.\u00a0 In the late 1990\u2019s it was all the rage.\u00a0 Yes, CPFR (Collaborative Planning Forecasting and Replenishment), over-hyped by many, has fallen short in delivering the promise<\/p>\n<p>The results are clear.\u00a0 After ten years of active projects, collaborative planning forecasting and replenishment failed to reach its promise for three reasons:<\/p>\n<ul>\n<li><strong>Laborious.<\/strong> Just too much work for the benefit.\u00a0 The added costs did not measure up to the benefit and the programs were not grounded in the six essential elements of collaboration.\u00a0 Instead, it was a process implemented in the absence of the core elements of what drives collaborative relationships.<strong> <\/strong><\/li>\n<li><strong>Retail forecasts not up to the task. <\/strong>For CPFR to work, retail forecast accuracy needs to be high and with sufficient granularity to ensure analysis.\u00a0 The dirty little secret with CPFR is that only three retailer forecasts\u2014Best Buy, Food Lion and Wal-Mart\u2014were up to the task.\u00a0 In addition, the gap in retailer data for perpetual inventories and accurate on-hand data could not give the teams a good starting point.<\/li>\n<li><strong>Lack of integration into Enterprise Systems. <\/strong> For most Advanced Planning System (APS)\/Enterprise Resource Planning (ERP) deployments, there was no logical connection for the data.\u00a0 As a result, it failed to make a systemic impact on supply chain excellence.<\/li>\n<\/ul>\n<p>So, as a result, most CPFR initiatives became 20-year old pilot projects.\u00a0 They were isolated\u2014lacking integration into corporate demand planning architectures\u2014and only as effective as the strength of the relationship and the quality of available data.<\/p>\n<p><strong>When does it make sense?<\/strong><\/p>\n<p>However, let\u2019s not throw the baby out with the bathwater.\u00a0 It would be incorrect to say that CPFR never makes sense. It was over-hyped and over-promised, and applied to situations where there was not a good fit.\u00a0 So, you might be saying, where does it fit?\u00a0 \u00a0When a company has these five stars to align, CPFR can be used to reap great benefit:<\/p>\n<ul>\n<li><strong>Significant channel presence. <\/strong>The account needs to be significant\u2014at least 10% of the channel-for the investment to warrant the expense.\u00a0 The greater the channel presence, the greater potential benefit. It must matter and make a difference.<strong> <\/strong><\/li>\n<li><strong>High Demand Volatility: <\/strong>CPFR makes more sense for products with short life cycles, seasonal patterns, strong dependence on weather, and in competitive categories.\u00a0 It makes less of an impact for products that have stable demand.\u00a0 Companies benefit from advance warning signals.<\/li>\n<li><strong>Strong Retail Partnership. <\/strong>The data is clean, available and meaningful to both parties\u2019 business objectives.\u00a0 Both companies have strong planning skills and a passion for forecast accuracy.\u00a0 It is tied and closely coupled to the business.<strong> <\/strong><\/li>\n<li><strong>The Tie to Replenishment can make a Difference: <\/strong>Many companies forget the \u201cR\u201d in CPFR.\u00a0 If he advanced notification from forecast sensing can make a difference in improving replenishment and the other conditions can be satisfied, go for it!\u00a0 However, not all replenishment cycles can be shifted in concert with the CPFR signals<strong> <\/strong><\/li>\n<li><strong>Right Stuff:<\/strong> It makes sense when there is demand architecture to support close coupling of the demand signal.\u00a0 The architecture must allow integration at the account, ship-to level.\u00a0 <strong> <\/strong><\/li>\n<\/ul>\n<p><strong>What now?<\/strong><\/p>\n<p>The key is to be judicious.\u00a0 CPFR has a place in driving <a href=\"http:\/\/www.ibf.org\/conferences.cfm?fuseaction=conferenceDetail&amp;conID=296\">supply chain excellence<\/a>; just not the over-hyped promise of ten years ago.\u00a0 Be more judicious.\u00a0 Be more realistic.\u00a0 Make smarter decisions.<\/p>\n<p style=\"text-align: center;\"><strong><a href=\"http:\/\/www.ibf.org\/conferences.cfm?fuseaction=conferenceDetail&amp;conID=297\">See Lora Speak at IBF&#8217;s<br \/>\nFirst Ever:<\/a><\/strong><\/p>\n<p style=\"text-align: center;\">\n<div id=\"attachment_1013\" style=\"width: 480px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/www.ibf.org\/conferences.cfm?fuseaction=registerItems&amp;conID=297\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1013\" class=\"size-full wp-image-1013\" title=\"ChinaBanner\" src=\"https:\/\/demand-planning.com\/wp-content\/uploads\/2010\/11\/ChinaBanner.jpg\" alt=\"IBF's Supply Chain Forecasting &amp; Planning Conference: Asia\" width=\"470\" height=\"185\" \/><\/a><p id=\"caption-attachment-1013\" class=\"wp-caption-text\">Supply Chain Forecasting &amp; Planning Conference: Asia<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Go to any supply chain conference, and you will hear it.\u00a0 Yes, the term collaboration is bandied about. It is over-used and often over-hyped in discussions largely without meaning.\u00a0 So, what does it mean?\u00a0 And, what happened to the supply chain collaboration initiatives of the 1990s? Let\u2019s start with the definition.\u00a0 The greatest success in [&hellip;]<\/p>\n","protected":false},"author":448,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[62,182,67,183,184,163,69,36,48,185,73,74,38,186],"class_list":{"0":"post-1011","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-forecasting-and-planning","7":"tag-collaborative-forecasting","8":"tag-cpfr","9":"tag-demand-planning-and-forecasting-conference","10":"tag-demand-volatility","11":"tag-enterprise-systems","12":"tag-erp","13":"tag-forecast-accuracy","14":"tag-ibf","15":"tag-institute-of-business-forecasting-and-planning","16":"tag-replenishment","17":"tag-sales-operations-planning","18":"tag-sales-forecasting","19":"tag-supply-chain","20":"tag-vmi"},"_links":{"self":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/1011"}],"collection":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/users\/448"}],"replies":[{"embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/comments?post=1011"}],"version-history":[{"count":0,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/posts\/1011\/revisions"}],"wp:attachment":[{"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/media?parent=1011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/categories?post=1011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/demand-planning.com\/wp-json\/wp\/v2\/tags?post=1011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}